Papert, Koenig, Lois

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Formed in a reorganization of Papert & Free as Papert, Koenig, Lois, 1960; became only second U.S. agency to go public, 1962; agency closed, 1969.

Papert, Koenig, Lois began in January 1960 when the husband-and-wife team of Frederic and Diane Papert added Julian Koenig and George Lois from Doyle Dane Bernbach to their already existing agency, which had been known as Papert & Free. The reorganized shop was called Papert, Koenig, Lois.

Xerox Corp. assigned the advertising for its office copiers to PKL in May 1961, and the agency demonstrated the copier's simplicity by showing a chimpanzee operating the machine. Pharmacraft Laboratories picked PKL for it Fresh deodorant brand, and Clark Oil & Refining Corp. switched to PKL from Tatham-Laird.

On May 14, 1962, the agency made a move that changed the financial structure of the industry. It filed with the U.S. Securities & Exchange Commission to sell 100,000 shares of class A common stock. The announcement startled the industry.

First, no ad agency since Albert Frank-Guenther Law in 1929 had made a public offering, and in that case the outstanding equity was only about 2%. Second, although stock offerings were being discussed in the industry, most observers assumed that the first to make the move would be a major agency. Third, the lack of hard capital in the service-oriented ad business seemed to make it an unlikely enterprise in which to sell stock.

Finally, the traditional nature of the business had always favored confidentiality in deference to clients; for an agency to offer stock would require it to disclose much specific financial information.

Billings for the year, however, rose dramatically, from $5.9 million in 1961 to $14.7 million in 1962. Other agencies followed PKL's lead, including Foote, Cone & Belding (in 1963) and DDB (in 1964). In 1964, the agency opened an office in London, and in June 1965, it picked up business from Procter & Gamble Co.'s $1.5 million Salvo detergent tablet account. It also won a $5 million assignment from National Airlines, a client it had served briefly in 1963.

Along with DDB, the agency became a significant player in political races, helping Jacob Javits in his 1962 U.S. Senate race as well as Robert Kennedy in his 1964 Senate campaign.

In May 1967, PKL then the No.17 U.S. agency with billings of $40 million, underwent another reorganization. Norman Grulich succeeded Mr. Koenig, who became chairman of a newly formed PKL executive committee. In September, Mr. Lois, who was reportedly preparing to head a PKL special projects subsidiary, announced he was leaving the agency with two other executives to set up a new shop. PKL's billings dropped by 25% in the next 18 months, and the loss of Xerox proved particularly hard for PKL.

In 1969, Mr. Papert took over the presidency, but PKL's fortunes continued to fall, and by the end of 1969 the shop had faded out of existence.

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